Tag: covid

Paytm launches ‘Postpaid Mini’ – The Hindu BusinessLine

Banking & Finance

[ad_1]

Read More/Less


Digital financial services platform Paytm has launched Postpaid Mini, an extension of its Buy Now, Pay Later service, to drive affordability amongst those new to credit.

The small-ticket instant loans will give flexibility to users to maintain liquidity during the Covid pandemic. This service has been launched in partnership with Aditya Birla Finance Ltd.

With the launch of Postpaid Mini, the company will offer access to loans ranging from ₹250 to ₹1,000, in addition to Paytm Postpaid’s instant credit of up to ₹60,000. This will enable users to pay for their monthly expenses, including mobile and DTH recharges, gas cylinder booking, electricity and water bills, shop on Paytm Mall and more, according to the company.

Fintech will be the silver bullet for growth in 2021

Driving consumption

Bhavesh Gupta, CEO, Paytm Lending, said in a statement: “We want to help new-to-credit citizens start their credit journey and develop financial discipline. Through Postpaid we are also making sincere attempts to help drive consumption in the economy. Our new Postpaid Mini service helps users manage their liquidity by clearing their bills or payments on time.”

Paytm eyes $3-billion IPO

With this service, Paytm Postpaid is offering a period of up to 30 days for repayment of loans at 0 per cent interest. There are no annual fees or activation charges, only a minimal convenience fee.

Through Paytm Postpaid, users can pay at online and offline merchant stores across the country. Paytm Postpaid is currently available in over 550 cities in India.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , , , , ,

Banks’ exposure to airports doubles over last year

Banking & Finance

[ad_1]

Read More/Less


The outstanding amount of gross bank credit by Indian airports has doubled to ₹9,464 crore as of May 2021 compared to ₹4,519 crore last year, according to data put out by the Reserve Bank of India.

Industry experts believe that the increase in bank credit is because of many airports facing a cash crunch due to the Covid-19 pandemic. Some airports may have taken credit to undertake expansion activities as well.

The domestic passenger traffic, which had started seeing a steady ramp-up post resumption of airport operations from May 25, 2020, reaching 64 per cent of the previous year levels in February 2021, had again suffered a setback due to the second wave of restrictions.

Expansion projects

But at the same time, major airports have been undertaking significant expansion projects. In Bangalore, there was a runway expansion. Hyderabad, too, has come up with a new terminal, significantly upping its capacity targeting close to over 30 million passengers. Delhi, too, is coming up with a fourth runway.

Post FY19, the debt in the airport sector was expected to rise as most airports had initiated large capital expenditure (capex) to increase their capacity. As these airports started using their past accruals towards the initial capex requirements, the overall debt started rising during the last 12-18 months, Vishal Kotecha, Associate Director at India Ratings explained. Some airports may also avail additional debt to shore up their liquidity due to the uncertainty in traffic patterns leading to cash flow mismatches, the experts said.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , ,

Bommai, BFSI News, ET BFSI

Personal Finance

[ad_1]

Read More/Less


Bengaluru: Union Finance Minister Nirmala Sitharaman has agreed to release funds under Karnataka‘s share of central award schemes besides the pending GST compensation, Karnataka Home Minister Basavaraj Bommai said on Friday. According to him, Sitharaman assured him that a balance amount of Rs 11,800 crore GST compensation would be released. Further, the Centre will provide Rs 18,000 crore GST compensation by borrowing from the financial institutions.

The state Home Minister said he also requested Sitharaman to release the first instalment of the state’s share in the GST collected in the first quarter of the current fiscal.

The Union Minister is on a two-day visit to Bengaluru where she took part in various events.

On Friday, Bommai called on her and put forth the request, following which she gave him assurance about releasing the grants under the Central Award schemes.

Later, in a statement, Bommai said he had discussions with Sitharaman on the economic situation in the state and various schemes of the central government.

“A request was made to provide financial assistance to the State Government under various schemes by the Centre…Responding positively Nirmala Sitharaman assured to release Karnataka’s share of funds under Central schemes at the earliest.” Bommai said in a statement.

During the meeting Bommai discussed with Sitharaman the financial arrangements required for the coronavirus management and possible COVID third wave.

“In response, she assured us to ensure that there is no financial hindrance in COVID-management.” the minister said.

According to Bommai, Sitharaman hailed the Karnataka government’s COVID-19 management.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , ,

Personal loans keep banks afloat in FY21 as industrial credit demand sinks, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Credit growth to the industrial sector remained in the negative territory during 2020-21, mainly due to the COVID-19 pandemic and resultant lockdowns, RBI data showed on Tuesday. However, “personal loans continued to grow at a robust pace and recorded 13.5 per cent growth (Y-oY) in March 2021; industrial loan growth, on the other hand, remained negative during all quarters of 2020-21.”

The RBI further said working capital loans in the form of cash credit, overdraft and demand loans, which accounted for a third of total credit, contracted during 2020-21, indicating the impact of the coronavirus pandemic.

Private banks

The data further revealed that private sector banks recorded higher loan growth when compared to public sector lenders. Their share in total credit increased to 36.5 per cent in March 2021 from 35.4 per cent a year ago and 24.8 per cent five years ago, it said.

However, the private sector banks’ loan growth slowed to 9.1 per cent in FY21, from 9.3 per cent in FY20. Public sector loans grew 3.6 per cent in FY21, down from 4.2 per cent in FY20. The lending by foreign banks shrunk by 3.3 per cent during 2020-21 as against a growth of 7.2 per cent a year ago.

Credit to the household sector rose by 10.9 per cent (Y-o-Y) and its share in total credit increased to 52.6 per cent in March 2021 from 49.8 per cent a year ago, as per the ‘Quarterly Basic Statistical Returns (BSR)-1: Outstanding Credit of Scheduled Commercial Banks (SCBs), March 2021’, released by the central bank.

Industrial credit

Growth in credit to the private corporate sector, however, declined for the sixth successive quarter and its share in total credit stood at 28.3 per cent. RBI said the weighted average lending rate (WALR) on outstanding credit has moderated by 91 basis points during 2020-21, including a decline of 21 basis points in Q4.

It also said bank branches in urban, semi-urban and rural areas recorded double-digit credit growth (Y-o-Y) in March 2021, whereas metropolitan branches, which accounted for 63 per cent of bank credit, logged 1.4 per cent growth.

Overall credit growth in India slowed down in FY21 to 5.6 per cent from 6.4 per cent in FY20 as the economy was hit hard by Covid. and subsequent lockdowns.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , ,

NBFC-MFIs: Sector sees nearly 25% decline in FY21

Banking & Finance

[ad_1]

Read More/Less


The Covid related economic slowdown and an increased focus on recovery and collections has dragged down disbursements made by NBFC-MFIs in FY-21. The sector witnessed nearly 25 per cent decline in disbursements at ₹57,891 crore in 2020-21, as compared to ₹76,956 crore in 2019-20.

The Gross Loan Portfolio (GLP) of NBFC-MFIs stood at ₹81,475 crore as on March 31, 2021, a growth of around 11 per cent as compared to ₹73,412 crore as on March 31, 2020, as per data available in the 36th issue of Micrometer, a report put out by MFIN (Microfinance Institutions Network).

Also read: Microfinance loan portfolio grows 11.9% to ₹2,59,377 cr as on March-end: MFIN

The number of loan accounts was also down by 39 per cent at 1.70 crore accounts, as against 2.78 crore accounts, however, the average loan amount disbursed per account was higher by around 20 per cent at ₹35,726 during FY-21, compared to the same period last year.

Microfinance loan disbursals during the fourth quarter of FY-21 was up by 29 per cent at ₹91,516 crore as against ₹71,090 crore during the same period last year. Sequentially, disbursements grew by 54 per cent from ₹59,508 crore during the third quarter of FY-21.

Loan disbursal up

The number of loans disbursed during Q4 2020-21 increased to 2.30 crore from 1.79 crore in Q3, signifying steady progress towards normalcy, the report said.

The overall microfinance industry currently has a total GLP of ₹2,59,377 crore as on March 31, 2021, an increase of around 12 per cent on a year-on-year basis as compared to ₹2,31,787 crores as on March 2020. This is on the back of healthy addition of four lakh unique borrowers during the pandemic-struck 12 months for the period ending March 2021, the report said.

While NBFC-MFIs portfolio increased by nine per cent, banks’ share increased by nearly 23 per cent, SFBs saw a marginal rise of around two per cent while NBFCs witnessed a decline of around five per cent.

In terms of regional distribution of GLP, East, North East and South together account for 66 per cent of the total portfolio.

PAR improves

On the asset quality front, the portfolio at risk (PAR), which had been on an upward trend since March 2020, has witnessed an improvement post December 2020. However, the improvement in 30-day PAR as of December 2020 is mainly due to write-offs and restructuring of loans under RBI resolution framework, the report said.

According to Alok Misra, CEO and Director, MFIN, the industry has been able to cover up well for the standstill in operations in the first two quarters of FY-21, thereby showing an overall growth in portfolio and first time borrowers during the year.

“Going forward, RBI’s consultative document on regulation of microfinance would bring a paradigm shift in how microfinance is implemented by restoring parity among various types of lenders. Further, proactive measures by RBI through its resolution framework and pushing liquidity through targeted schemes along with the Finance Minster’s latest announcement on credit guarantee scheme on term loans to MFIs, provides renewed impetus to the sector’s recovery and its contribution towards financial inclusion,” he said.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , ,

IBC cases per RP may be capped, Code of ethics strengthened, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


The Indian Institute of Insolvency Professionals of ICAI (IIIPI) is working on a four-point plan for insolvency professionals.

The plan includes setting limits on the number of permissible assignments for each executive and their role in the prepack package for MSMEs.

The plan

IIPI has conducted study groups on four matters of contemporary topics on enhancing the role of small-sized IPs, response of insolvency regime to Covid, clarifying roles of IPs in respect of prepack framework for MSMEs, and creating code of ethics for our professional members.

The reports of these study groups are may take a month to complete.

The self-regulator and IBBI are aiming to strike a balance between resolution professionals coming from large institutions and standalone individual IPs, with the latter often finding themselves at a relative disadvantage in comparison with executives from top-draw consultancies.

IIIPI is also set to recommend urgent covid-response measures that IPs will likely follow in proposing any resolution plan. The quasi-judicial body is also defining a prudent role of IPs in the pre-packs.

IIIPI is drawing on best practices to craft a role for MSMEs, where promoters face default occasions due to macroeconomic environment or policy changes.

It has tapped legal expertise in the UK where prepack packages are a hit.

IIIPI is drawing a code of ethics by adding more clauses to the IBBI statute already available.

The recommendations would need to be approved by both the Insolvency and Bankruptcy Code of India (IBBI) and the government.

There are 3,500 insolvency professionals, three insolvency professional agencies, 80 insolvency professional entities, 4,000 registered valuers, 16 registered valuers’ organisations and one information utility.

IBC cases per RP may be capped, Code of ethics strengthened

IBC so far

Since the provisions of the Corporate Insolvency Resolution Process (CIRP) came into force on December 1, 2016, a total of 4,376 CIRPs have commenced till the end of March this year.

Out of the total, 2,653 have been closed, including 348 CIRPs that ended in approval of resolution plans. As many as 617 CIRPs were closed on appeal or review or settled, while 411 were withdrawn and 1,277 ended in orders for liquidation, as per IBBI’s latest quarterly newsletter.

Significant improvements in the score for resolving insolvency made doing business in India easier and the emergence of new markets for resolution plans, interim finance and liquidation assets are among others.

Apart from the few missing elements such as cross border and group insolvency to complement corporate insolvency, an institutional framework for grooming a cadre of valuers is sometime away.

As compared to the previous regime which took nearly five years for a conclusion, the process under the Code yielding a resolution plan takes on average 400 days. It, however, falls short of intended 180/270 days.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , ,

Analysts, BFSI News, ET BFSI

Personal Finance

[ad_1]

Read More/Less


New Delhi: Macroeconomic data, the pace of vaccination and global trends would be the major drivers for the domestic equity markets this week, analysts said. Besides, the progress of monsoon will also be monitored.

“This week marks the beginning of the new month also, so participants will be eyeing the high-frequency indicators like auto sales and manufacturing PMI during the week. Besides, the progress of monsoon will also remain on their radar.

“While the pace of vaccination drive is certainly encouraging as it gives hope of further unlocking by the states, the cases of new COVID variant might derail the plans,” said Ajit Mishra, VP Research, Religare Broking.

“This week, the market is expected to continue its focus on global events as the domestic market lacks key triggers. Manufacturing PMI data is the major domestic economic data awaiting its release this week.” Vinod Nair, Head of Research at Geojit Financial Services said.

Market participants would also monitor the movement of Brent crude, investment pattern of foreign institutional investors and the rupee.

Nirali Shah, Head of Equity Research, Samco Securities said, “Domestic indices are expected to mirror global equities. June auto sales numbers would give investors a fair idea around the revival of ground-level sentiment.”

“Investors will be watching the progress on daily caseload, vaccination ramp-up and monsoon progress in the near term,” said Binod Modi, Head Strategy at Reliance Securities.

During the last week, the 30-share BSE benchmark gained 580.59 points or 1.10 per cent.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , , , ,

In Covid year, banking sector sees record profit of Rs 1 lakh crore, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Mumbai: The banking sector has recorded its highest ever profits of Rs 1,02,252 crore in FY21, a year when the economy was battered by the pandemic. This is a significant turnaround compared to a net loss of nearly Rs 5,000 crore for the industry in FY19.

Two banks — HDFC Bank and SBI — contributed half of the industry’s profits. Of the total profits, HDFC Bank at Rs 31,116 crore accounted for 30%, an 18% increase over the previous year. The country’s largest lender SBI accounted for another 20% at Rs 20,410 crore. The third-highest was ICICI Bank, which earned Rs 16,192 crore, more than double what it earned in the previous year. Private banks also gained market share as public sector banks (PSBs) went slow in lending.

The biggest turnaround was among PSBs which reported a collective net profit for the first time in five years. Only two of the 12 PSU banks — Punjab & Sind Bank and Central Bank of India — reported a net loss for the year. In the private sector, Yes Bank remained in the red with a net loss of Rs 3,462 crore as it continued to make provisions. However, for banks in the red, the losses were lesser than what they reported in the previous year.

The single biggest reason for PSBs to post such a Rs 57,832-crore turnaround was the end of their legacy bad loan problem. This burden reached a peak after the RBI forced banks to classify 12 large defaulting accounts, followed by another 40 accounts, as non-performing assets and initiate bankruptcy proceedings. Given the size of these exposures, the move resulted in loans worth Rs 4 lakh crore turning bad. By March 2020, banks had completed making provisions for most of these loans. Additional provisions were offset by large recoveries from earlier written-off accounts, and banks stopped bleeding.

According to rating agency ICRA, the profits for the current year were the windfall gains on bond portfolios of public banks account, which contributed two-thirds of their profits before tax in FY21. The rating agency added that barring SBI, profit from the sale of bonds exceeded the pre-tax profits of all other public banks. The profit from bond sales was higher than the Rs 20,000-crore capital infused by the government in FY21.

The value of government bonds rises when interest rates fall. The RBI’s aggressive move to keep rates low has reduced interest income but provided huge gains in treasury income. The year 2020-21 was also a year of consolidation for the 10 public sector banks that merged into four. Last year, the merging entities recorded huge losses in the fourth quarter before the merger, which contributed to the Rs 26,015-crore loss among PSU banks in FY20. This year, the acquiring banks made profits with Indian Bank topping the list at Rs 3,004 crore followed by Union Bank at Rs 2,905 crore.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , , , ,

Edelweiss General Insurance to focus on health and motor segments

Banking & Finance

[ad_1]

Read More/Less


InsurTech startup Edelweiss General Insurance has tied up with a number of Internet economy firms, and small and medium enterprises (SMEs) for group health policies and believes that there is much more demand from the segment, especially for Covid care covers.

“We have identified a target segment for our group health policies, which are smaller start ups and SMEs. International trends show that large companies manage it themselves as the numbers are so large. The segment we are going after is SME and start up companies with less than 1,000 employees,” said Shanai Ghosh, Executive Director and CEO, Edelweiss General Insurance.

Also read: Edelweiss Financial Services posts net profit of Rs 637 crore in Q4

In an interaction with BusinessLine, Ghosh said the segment is not only profitable but also needs support to manage its group policies. The insurer is also seeing a lot of demand from companies for Covid care insurance. It has tied up with Ola and Dunzo to provide such policies for their driver partners and delivery personnel.

“There are several such internet economy start ups where we have partnered with them to provide health cover for their employees and associates,” Ghosh said.

The insurer offers it own group corona policies and also has options such as a fixed benefit plan for such companies. Meanwhile, Ghosh said the insurer will continue to focus on health and motor segments despite the challenges seen in them in the last one year.

Also read:Edelweiss General Insurance ties up with Okinawa Autotech for e-bike insurance

“Health is a focus for us since day 1,” she said while noting that the Covid-19 pandemic will continue to challenge our profit and loss and pricing.

In the motor segment, apart from private vehicles, Edelweiss General Insurance is also selectively getting into some commercial vehicles and 2 wheeler space also.

The general insurer registered a 49 per cent growth in premiums in 2020-21, which was led by private car and retail health insurance. Private Car insurance grew by 46 per cent on a year on year basis in 2020-21 for the company while retail health expanded by 182 per cent last fiscal.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , ,

How savings were impacted by Covid second wave

Banking & Finance

[ad_1]

Read More/Less


Faced with the surge of Covid-19 infections in recent months combined with lockdowns that led to job losses and drop in income, many households are understood to have started using their accumulated savings to fund expenditure.

This, in turn, has led to concerns over a decline in the savings rate that could hamper further recovery.

According to the Reserve Bank of India’s monthly bulletin for March, household net financial savings rose to 21 per cent of GDP in the first quarter of 2020-21 and fell to 10.4 per cent in the second quarter. A report by Motilal Oswal in April had said household net financial savings had likely fallen to 8.4 per cent of GDP in the third quarter last fiscal.

Anecdotal data as well as the slowdown in bank deposits indicate that household savings have been impacted by the second surge of Covid-19 infections.

Bank deposits

Deposits of commercial scheduled banks grew 9.7 per cent on an annual basis to ₹1,51,66,808.18 crore for the fortnight ended May 21, 2021 as against a 9.9 per cent growth in the fortnight ended May 7, 2021.

“Growth in deposits with scheduled commercial banks (a proxy for household saving, having about 50 per cent share in households’ overall savings portfolio), has declined starting April 2021. Last year, in contrast, deposit growth had moved up. This could be indicative of pressure on incomes and a simultaneous rise in medical expenditure given the heightened ferocity of the second wave,” said a recent report by Crisil.

People also seem to be withdrawing funds from retirement savings. By May 31, 2021, the EPFO had settled over 76.31 lakh claims under the Covid-19 advance scheme amounting to over ₹18,698.15 crore. The government has now allowed a second round of such withdrawals from the Employees’ Provident Fund.

Gold auction

Gold loan NBFCs are auctioning more gold in recent months indicating higher distress amongst borrowers. For instance, Manappuram Finance said it auctioned gold worth ₹404 crore in the fourth quarter of 2020-21 compared to ₹8 crore in the nine month period ended December 2020.

Sale of life insurance policies has also declined in recent months but there are expectations that it may revive in coming months.

“Equity markets have been performing well. It is expected that products such as mutual funds and ULIPs will continue to do well this fiscal as bank deposits have lost their sheen,” said an executive with a private insurer.

 

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , ,
1 … 5 6 7 8 9 … 17